Q&A: YuuZoo’s CEO on Creating a Different Kind of Social Network

When he’s not plotting to re-create Nokia Corp.’s greatest achievements in the mobile phone market, Thomas Zilliacus, chief executive of the “third generation” social networking service YuuZoo, is monetizing online interactions for brands in a way that industry giants like Facebook Inc. are missing.

Thomas Zilliacus, chairman and CEO of YuuZoo Corp.

YuuZoo Corp.

The charismatic executive from Finland, now 59 years old, first came to Asia in 1986 to explore growth prospects in the region for Nokia. Now 27 years down the line, through his company Mobile FutureWorks, Mr. Zilliacus owns a controlling stake in YuuZoo, a Singapore-based start-up which makes bespoke social networking platforms for brands, organizations and interest groups, including fans of the new Grand Theft Auto V video game.

In an interview with The Wall Street Journal, Mr. Zilliacus spoke more about YuuZoo’s niche and its plans for a listing on the Singapore stock exchange by way of a reverse takeover. Edited excerpts:

Mr. Zilliacus: Straight out of business school in Finland I was offered a job as Nokia’s global head of branding and marketing and public relations at the head office and then spent 16 years in senior positions there…before I left and started Mobile FutureWorks. We invested in YuuZoo on day one. I really was an investor [rather than founder] but did indeed develop it from day one.

WSJ: What does it do?

Mr. Zilliacus: Just yesterday I spoke with an investor who said: “You are doing so many things what is your focus?” I said no, you misunderstood, we are not doing many things, we are doing one single thing which is combining e-commerce and social networking–so social shopping is what it’s all about.

Our systems incorporate an advertising platform, a payment platform…and e-commerce platform. What we build are these networks that are targeted either on a specific business, or an interest area or a location. Our networks combine–we hope at least–the best elements of all the different things that are available on the Internet. [Members] do not need to be friends with anybody so you can join any discussion you want.

But it’s a very focused network where you find people who share your passion…The average visit time in a targeted network is up to five times higher than it is in a general network [like] Facebook [or] Twitter.

WSJ: What are your plans for expansion?

Mr. Zilliacus: We were approached with the idea of doing a reverse takeover a little bit less than a year ago. One of the things we want to do and have already started is acquisitions. We signed an agreement to acquire IAH Games, [the Asian distributor of video games such as Grand Theft Auto and Fifa] subsequent to listing. The best case scenario is we could be listed by December. YuuZoo’s valuation is S$490 million ($394 million).

We have signed with a leading player in the Middle East for a franchise and joint venture agreement for 22 countries. This company, Arcoten [Holdings Ltd.], has acquired a license…we are building with them a joint operation where we provide the technology and they provide the marketing and everything else.

WSJ: Can you give an example of the services you offer?

Mr. Zilliacus: Say a football team–Manchester United– that is a good example. Manchester United fans want to talk with other fans and they want to talk with the players, and coaches and anyone who is associated with the club.

[As a business or brand,] having your own environment enables you to build your own offering to the consumer.

Facebook is [like] a department store, the [bespoke network is like an outlet] where people go because there is something additional that they’re being offered there.

WSJ: Why would any business pay for a YuuZoo network rather than create a free Facebook page?

Mr. Zilliacus: The benefit…is that when you own your own targeted network you benefit from advertising revenue…which you cannot do on Facebook. [any businesses are] pushing people to Facebook…and they do not share a penny. Facebook didn’t immediately respond to requests for comment.

That means that [companies] have to offer the user something additional on [their] own social network that Facebook is not able to do. Which I think is simply going deeper into the specific interest area that is being offered.

WSJ: Has the idea worked?

Mr. Zilliacus: Yes. Last year’s revenue was $27.3 million with $5.2 million in net profit. Initialgrowth wasn’t that fast…but we now have close to 38 million users in 164 countries. We started in May 2008 and became profitable in 2011.

WSJ: Are you afraid Facebook or Twitter could turn around and stamp on YuuZoo?

Mr. Zilliacus: They are already big and have a huge user base. But my thinking is more why would they [offer a bespoke social networking service] because they already have a good business model. And that is very different to ours There are companies that have elements of what we do…but with the same overall approach we haven’t found others.